Chinese traders wary of Indonesian thermal coal imports amid thin profit International,  Thermal Coal 2022-05-11 17:39:27

Chinese traders are cautious of buying thermal coal from Indonesia, as it would be almost profitless compared with domestic utilities' tender prices.

Sandwiched by high selling prices from Indonesian miners and relatively low acceptance of Chinese utilities, traders were not active in purchasing Indonesian coal for the time being. If failing to lock buying prices at a fixed exchange rate, they can hardly make money, traders said.

Currently, Indonesian miners offered 3,800 Kcal/kg NAR thermal coal for Panamax cargoes at $98-100/t FOB. "If utilities don't award cargoes of this grade at prices above 850 yuan/t (on a CFR basis with VAT), traders cannot make money," said a Beijing-based trader.

A state-owned utility on May 10 invited bids for 598,000 tonnes of imported coal to be delivered in late May to early June with calorific values from 3,000 Kcal/kg to 5,000 Kcal/kg NAR.

Tender results are yet to be known at of the time of writing, but some bids from traders were heard at 820-872.5 yuan/t for 3,800 Kcal/kg NAR. Considering the exchange rate and $12-13/t Panamax shipping rate from South Kalimantan to South China, bidding prices would be $96-103/t FOB.

"The bidding prices have left a potential profit margin for traders, but the utility may choose to reject," said a Guangdong-based trader.

The exchange ratio is a variable for traders' profitability, given the recent sharp depreciation of Chinese yuan against the dollar, the trader added.

Coal consumption at power plants in South China declined this week because of the rainy weather. Guangdong's meteorological center on May 11 reported nearly half of the cities in the province were hit by rainstorms, with eight cities issuing the highest-level red alarms. It is expected the rainfall would keep strength in the next few days.

The monsoon season has started earlier this year in the south, which may slow utilities' restocking progress, the trader said.

Chinese traders are also eying a potential growth in Russian coal imports in the future, but the tonnage is presently low because of tightened supply and uncompetitive prices, although the settlement methods have become less a problem.

Russian 4,700 Kcal/kg NAR thermal coal was roughly offered at 1,050 yuan/t CFR South China with VAT, and 5,500 Kcal/kg NAR grade was at 1,260 yuan/t CFR, almost on par with the domestic cargoes for this grade.

Currently, the majority of Russian shipments are still flowing into South Korea and Japan, and some small buyers in Europe before the EU embargo order taking effect mid-August, traders noted, adding they are outbidding Chinese buyers.

On May 11, the CCI 4700 Import index, gauging the trading level of Indonesian 4,700 Kcal/kg NAR coal, reached $148/t CFR China, flat from a day ago. CCI 3800 Import index was $106/t CFR, and the FOB index $91/t, both unchanged from a day before.

(Writing by Alex Guo  Editing by Tammy Yang)
For any questions, please contact us by or +86-351-7219322.

Share this article
Connect with us

Editor's Pick

1 Indonesian thermal coal prices edge up amid tight supply, increased demand 2022-11-29

Indonesian thermal coal prices edged higher on November 29 as traders reported limited availability in the market and increased demand from Chinese buyers on concerns of colder weather. L

2 China's portside thermal coal prices gain further on wintry weather 2022-11-29

After snapping a five-week price decline a day earlier, Chinese portside thermal coal prices advanced a little further on November 29, buoyed by cold weather among other factors. On Novem

3 Sentiment divided at N China's thermal coal market 2022-11-29

China's thermal coal miners gradually developed divided opinions about subsequent market. Some optimistic views emerged, betting the strongest cold wave this year would prompt power utilities' large-s

4 Shanxi coking coal miners see inventory rise amid transport curbs 2022-11-29

Coking coal inventories started to accumulate regionally in Shanxi, where miners are striving to maintain normal production but outward coal dispatches are significantly impacted as the top production

5 China Coal Daily Track (Nov 29) 2022-11-29

Thermal coal Production area Some coal miners kept cutting offers after top miner's lower purchase prices for outsourced cargoes, which lured some interest and improved sales mildly. Impacted by

6 China futures market updates at close (Nov 29) 2022-11-29

Check out latest updates on the Chinese futures market for thermal coal, coking coal, coke and others at close.

7 Data Insight | Imports take reduced share in China's thermal coal supply 2022-11-29

Overseas cargoes have taken a reduced share in China's overall thermal coal supply since this year, as the country tried to wean off reliance on foreign supply by tapping into domestic production pote

8 Weekly: China PCI coal prices steady as COVID stirs cautious stance 2022-11-29

China's PCI coal prices were generally stable last week, as participants shifted to cautious stance alongside the tightened transportation curbs following a new wave of COVID outbreaks at production a

9 Inner Mongolia's Ordos reports rise in both coal production and sales 2022-11-29

Coal-rich Ordos city in northern China's Inner Mongolia region has produced and sold more coal since the start of the year in a move to ensure energy supply to the nation, Inner Mongolia Daily reporte

10 China's market electricity trading volume soars 43.3% on yr in Jan-Oct 2022-11-29

China's market-based electricity trading volume at all exchange centers in the country totaled 4,310.2 TWh in the first 10 month of the year, jumping 43.3% from the same period a year ago.

Most Read Articles

1 Germany Sep hard coal imports rebound to 5-mth high 2022-11-24

Germany's hard coal imports reached 2.88 million tonnes in September, a 7.3% rise year on year, rebounding to a five-month high, preliminary data from German Statistics Bureau showed.

2 Japan Oct crude steel output up 2.9% MoM 2022-11-24

Japan produced 7.35 million tonnes of crude steel in October, up 2.9% month on month but down 10.6% from the previous year, showed data from the Japan Iron and Steel Federation. In the mo

3 Newcastle thermal coal prices rise on expectations of surging demand from Europe 2022-11-28

Newcastle thermal coal prices increased as demand is expected to surge in Europe where temperatures are forecast to start dropping dramatically in the next two weeks. On November 25, the

4 Ganqimaodu's imported coal stocks expected to rise as virus disturbs sales 2022-11-24

Imported Mongolian coal stocks at China's Ganqimaodu border port are expected to accumulate after the local authorities stopped outward coal delivery due to the rising COVID-19 infections while mainta

5 Mongolian coal exports up 88% over Nov 11-17 2022-11-25

Mongolian exported 917,100 tonnes of coal from November 11 to November 17, surging 88% year on year,according to data from the Ministry of Mining and Heavy Industry. This brought th

6 NTPC to add 4.8GW coal power projects in next 3 yrs 2022-11-24

India's biggest electricity generating company NTPC was required by the government to award contracts for four more coal-fired power projects over the next three years. These four projects will add 4.

7 Mongolia opens new railway to China 2022-11-28

Mongolia opens a new rail line to China on November 25 in a move to expand commodity exports despite the COVID-slowed cross-border trades. The start of the 226.9-kilometer Zuunbayan-Khang

8 Indonesian low-CV thermal coal prices stable despite weak demand 2022-11-24

Indonesian low-CV thermal coal prices were largely unchanged on November 24 as limited availability offset the gloomy Chinese demand next month. Chinese utilities have been actively invit

9 Prices in freefall in China's leading coal hub on harsh COVID restrictions 2022-11-24

Thermal coal prices in China's coal-rich Inner Mongolia have fallen significantly as outbound truck haulage was heavily subdued by the regional COVID measures, market sources said. Accord

10 China's benchmark thermal coal prices slump below 1,300 yuan/t at N ports 2022-11-24

China's 5,500 Kcal/kg NAR thermal coal prices slumped below 1,300 yuan/t FOB northern portson November 23, as traders started dumping cargoes as panic sentiment was growing alongside sharper pri